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Change in Purchase Guideline

WB lending to land in trouble

Inam Ahmed
The government move to amend the public procurement guideline will throwthe lending programme of the World Bank into trouble as all agreements with the Bank will need to be revised.
The most affected will be Development Support Credit II (DSC) and DSC MI. Under the DSC M, the government received $200
million in budget support. The amount under the third phase is still to be decided.
The Bank has been receiving inquiries from its head office in Washington about the fate of the ongoing projects because if the amendment is passed in parliament, the agreements between the government and the Bank will be violated.
The WB believes that two of the
nine amendments — allowing 24 hours to open tender boxes after tender closure instead of three hours as stipulated in the Public Procurement Regulations 2003 and allowing government offices to procure goods directly from state-owned enterprises without open bidding - are steps in the reversal. If these two provisions are passed in parliament, the WB will not treat
them as satisfying conditions.
The amendments have already been okayed by the Cabinet Committee on Economic Affairs and will be sent to parliament soon.
"Fighting corruption Is one of the Bank's key objectives for growth," said a WB official. "The tendering process is a major area of corruption. The changes proposed will create more scope for corrupt practices as unscrupulous people will get more time to tamper with bid documents. Similarly, procurement without competition always breeds corruption."
Every development credit agreement on investment projects spells out how goods and services would be procured through competitive bidding. The ongoing projects had been signed before this move to amend the procurement guideline and so if these two clauses are changed, they will violate the contracts.
One of the major implications of the changes will be that all ongoing projects will be delayed leading to other complications.
"The Bank has already expressed its reservations about the proposed change," said an official. "Even if it decides to accept the amendments, all investment agreements will have to be changed.This would take quite some time."
On November 3, a meeting of the planning ministry decided to change the process of procurement to accommodate a range of objections and demand of different ministries.
Following this, World Bank Country Director Christine Wallich wrote to Finance Minister M Saifur Rahman saying that the changes would affect the Bank's lending and give rise to corruption.